1. The case of
Slouching Toward
Broadband
Revisited in 2005
Group : BT2C

2. Contains
• Introduction
•Flavors of broadband
•Broadband Over Cable TV Lines
•Broadband Over Phone Lines
•Satellite
•Coming attractions
•Broadband Over Powerlines (BPL)
•WiFi
•Fiber

3. Contains
•An ISP looks at broadband
•YAHOO! And its Allies
•Regulatory issues
•The importance of broadband
•Big bucks form broadband,but for Whom
•A national imperative?
•Conclusion

4. Introduction
• Americans consumed were “supersized”.
• Most Americans sipped the Web through slow dial-up
connections.
• There were many reasons for the slower-than-expected
adoption of broadband in the United States.
• Many other countries were making broadband penetration a
national priority,and their citizens were fast becoming more
wired than those in the United States.

5. Worldwide Broadband Penetration by Country

6. Worldwide Broadband Penetration by Country

7. Introduction
• By early 2005 the penetration of broadband had
improved in the United States, to the point where
around half of residential users accessed the Internet
via broadband
• A form of broadband known as digital subscriber
line (DSL) was offered by established telephone
companies and smaller companies competing with
them.
• A different form of broadband was offered by cable
television service providers.

8. Introduction
• In the late 1990s,cable companies pushed ahead in investing
upwards of $100 billion over eight years to upgrade their
networks.
• RBOCs held off investing much in their networks, and instead
lobbied Congress to roll back various provisions of the 1996 Act.
• DSL penetration continued to lag cable penetration in the
United States and Canada, making North America the only
region in the world where cable was the broadband leader.

10. Introduction
• RBOCs was the fact that their core business, providing
local phone service via the public switch telephone
network, was shrinking fast.
• Through high-speed Internet access, either RBOCs or
cable companies could provide this triple play, a market
estimated to exceed $134 billion in 2004.
• By the end of 2004, new technologies and
infrastructure were emerging that promised to upset
the balance between DSL and cable and consumers
more choices for broadband access.

11. Flavors of broadband
• There were several methods currently
available to deliver broadband to homes.
• In1999,84 % of consumer broadband subscribers used cable versus
16% with DSL.
• By the end of 2000, cable slipped to 55% versus 45% with DSL
• By June 2001, cable edge out DSL by 51% to 49%
• By the middle of 2004, DSL had far outpaced cable in most regions
around the world.

12. Broadband over cable TV lines
• A cable television service provider is a company that lays and
service coaxial cable and presents programming.
• The same coaxial cable that runs into each cable subscribers’
home is capable of delivering broadband Internet access as
well as telephone service.

13. Broadband over cable TV lines
To access the Internet
• A cable modem
• A device that attaches to the cable just like a TV converter
box

14. Broadband over cable TV lines
In the late 1980s, many cable companies began
upgrading their networks with high capacity fiber
optics.
High capacity fiber optics
• connected the l facility cable operator’s central
facility to each neighborhood area
• The data channel was shared among the homes
linked by coax to the end of the local fiber-optic line.
• The actual data rate achieved in any individual home
depended on the number of users sharing the channel
at a given time.
• download speeds 1 Mbs.
• upload speeds 200 Kbp.

15. Broadband over cable phone lines
• By 2004, most broadband over telephone lines used a
variety of DSL.
• In the United States,DSL service was provided by Incumbent
Local Exchange Carriers(ILECs) and Competitive Local
Exchange Carriers(CLECs).
• There were several ways available to transmit data at high
rates over the twisted air of copper wires.

16. Broadband over cable phone lines
• DSL services could be provided to homes within a 4-5
kilometer radius from the telecommunication exchange or
central office.
• The most widely deployed version was asymmetric DSL,or
ADSL
• download speeds under 1 Mbs. , upload speeds 200 Kbp.

17. Satellite • For customers not offered broadband services by cable
companies or ILECs.
• Satellite and wireless broadband Internet access to
consumers.
• By early 2002,DirecPC and StarBand used geostationary
satellites that orbit the earth 36,000 kilometers(22,000
miles) above the equator at the same speed as the earth’s
rotation to communicate with fixed-orientation dish
antennas attached to customers’ homes.
• As with satellite TV,trees and heavy rains could affect
reception of the Internet signals.

18. Coming attractions
• Most newer broadband technologies required new
infrastructure.
•The advantages in terms of transmission could make them
worthwhile.

19. Broadband over powerlines (BPL)
• This technology employed the electric wires already bringing
electricity to homes to carry high-speed Internet access.
• Powerlines were already in place and reached more homes
than either cable systems or even telephone lines.
• It also held the hope of using the electric wires that girded
homes and turning them into wired local area networks(LANs).
• In late 2004 BPL was still considered
unreliable and very expensive.
• There were many hurdles for the
technology to overcome.

20. Wifi: A potential hot spot for broadband
• This networking protocal(standard) governed wireless local area
networks that could transfer data at speed of up to 11 Mbs.,
faster than the less 1Mbs. That DSL provided, and far faster than
the 144Kbs. data transmission rates that 3G mobile service
providers planned.
• Users communicated with WiFi transmitters or base stations,
known as “hot spots,” via small antennas connected to devices
such as desktop or laptop computers and personal digital
assistants.
• Providers emerged offering subscription-based WiFi broadband
Internet access via a growing network of hotels, coffee shops,
airports and other facilities.

21. Wifi: A potential hot spot for broadband
• The drawback to WiFi was its very limited coverage area.
•By 2004, some cities were considering creating a series of
municipal hot spots to provide their residents free or low-cost
wireless broadband access via WiFi.
• One worry was that a newer wireless technology, such as
WiMax, which transmit broadband access signals 30 miles
instead of the 300 feet range of WiFi.

22. WiMax
• high-speed, low-cost wireless last mile
• Consumer could surf the Web at high speeds via wireless
transmission between distant WiMax broadcast equipment and
a WiFi base station or modem in their homes.
• WiMax would be high-speed Internet access to rural
consumers who were by passed by DSL and cable services.
• There were big roadblocks on the part to a WiMax world.
• technology and services were better proven
• Mobile WiMax required a narrower spectrum than WiMax
and worked in moving cars and trains, which WiMax would
not.

23. Fiber (Fiber-to-the-X,FTTx)
• This was a technology that particularly interested the RBOCs.
• With fiber, RBOCs could offer extremely high-speed Internet
access, telephone service, video-on-demand, and even high-
definition television service.
• Fiber-to-the-curb
• cost around $300 per household to install
• speed of around 25 Mbs.
• Fiber-to-the-home
• cost around $800 per household
to install
• speed of around 25 Mbs.

24. An ISP looks at broadband
• Internet service providers (ISPs)
• By the end of 2004,most of these ISPs consolidated or were
driven out of business.
•One large independent ISP remained: EarthLink.

25. An ISP looks at broadband
• Founded in 1994, EarthLink was the
third largest ISP in the U.S.
• By the end of 2004, EarthLink had
5.5 million subscribers.
• about $1.4 billion in annual revenue
• provided Internet dial-up(narrowband), broadband access via
DSL, cable, Web site hosting, Internet advertising, domain name
registration and e-mail.
• 62% of total revenue from narrowband access fees
• 32% from broadband access fees
• 6% from Web hosting and advertising
• The company had roughly 7% of the total market by the
end of 2004.

26. An ISP looks at broadband
• Almost 90% of the market was controlled by
and other large players such as cable MSOs
and RBOCs
• EarthLink’s customers or dealt directly with EarthLink, which in
turn leased access lines from ILECs or cable companies.
• Broadband access was a big problem for EarthLink.
• EarthLink pays between $125 million and $150 million each
year each year for access to the four largest ILECs.But that figure
is still too small to get their attention. They continue to make
decisions about pricing without consulting EarthLink.
• EarthLink now had access throughout the Time Warner cable
system.
• more success, easier and cheaper

27. An ISP looks at broadband
• For EarthLink, the richer surfing experience provided by
broadband helped spur demand for the company’s additional
value-added service.
•To make money, EarthLink had to price its service $10-$15 over
the lowest price offered by ILECs or cable companies.
•To keep customers paying this premium, EarthLink offered
around-the-clock customer support and a host of value-added
services.

28. YAHOO! and its allies
• Three years ago, the company embarked on an alliance with
RBOC SBC to provide co-branded DSL access to customers.
• The idea was to lend the cachet of the Yahoo! brand to the
RBOC, while took care of provisioning and maintaining the
physical network and billing customers.
• Broadband offered crucial avenues of growth to both
companies.
• It enables to offer more robust features, such as video services,
and other premium services.
• Broadband was being used as a centerpiece of a multiservice
strategy for both RBOCs and cable companies.
• value-added services which integrate across networks will
become crucial as a point of differentiation

29. YAHOO! and its allies
• Yahoo! Bundles some premium services to end users at no
extra charge.
•The financial value to Yahoo! was in the monthly subscriber fee.
•Yahoo! Found that broadband alliance usuers were more
engaged with other Yahoo! Services.

30. Regulatory issues
• Under the 1996 Act, RBOCs were required to share their
central office facilities with competitive telecommunications
service providers
• In the wake of the 1996 Act, RBOCs focused on defending
themselves against competition from CLECs.
• The cable industry, which was not regurated as a common
carrier, escaped many of the changes the RBOCs found most
onerous.
• Cable company, which had monopolies in theirs regions , spent
heavily to upgrade their networks to offer video-on-demand and
voice telephony as well as broadband.

31. Regulatory issues
• Broadband, along with Voice Over Internet Protocol(VoIP),
coexisted awkwardly with the Internet, access to which straddled
two highly regulated industries, cable companies and RBOCs,
which themselves were undergoing fundamental regulatory and
technological changes.
• In 2004, long distance carriers MCI, Sprint and
wrote down a total of $19 billion of phone assets.
• The RABOC’s revenue from local
phone services declined by $15
billion between 2001 and 2004,
falling 7% a year.

32. Regulatory issues
• In late 2004, RBOCs received a victory from the FCC which
decided not to force the Bells to share(unbundle) their new
fiber networks with rivals on regulated terms and conditions.
• A majority of FCC commissioners found that consumers would
benefit by making RBOCs more vigorous competitors to cable
companies, which play “a significant role in the current
broadband market.”

33. The importance of broadband
Big Bucks from Broadband, but for Whom
• Many economists pointed to networking as the crucial link
between increased IT performance and productivity gains.
• Others pointed to broadband as an important potential catalyst
for general economic growth in the United States.
• The study found consumers would benefit from enhanced
online home shopping and entertainment services as well as
from a variety of additional services.
• People with high-speed access searched for information and
made purchases online at approximately double the rate of
those with lower-speed analog modems.
• From 1996 to 2001, the average hours of Internet use per
person soared in the United States.

34. The importance of broadband
A National Imperative?
• TechNet, and prominent technology industry leaders, have
framed the issue of consumer broadband penetration as a
matter of national strategic importance.
• Regulatory policies should encourage all companies to deploy
these expensive and risky facilities.
• asking the government to offer tax credits to help companies
defray the costs of bringing broadband to poor and rural areas,
and exempting new RBOC broadband investments from federal
regulation

35. Conclusion
• Most Americans who purchased broadband access would use
cable or DSL
• At the same time, like continents formerly separated by an
ocean, the cable and ILEC industries were undergoing seismic
shifts that brought them closer together.
• The regulatory regimes that governed these industries were not
keeping up with these changes.
• Neither the cable industry nor the ILEC industry seemed to be
developing business models that would fully exploit the
fundamental changes that were taking place.
• Until broadband became ubiquitous, the service triple play
would remain out of reach for everybody.

36.
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